Foreign Investment

ere is my question: 1)What atomic number 18 the dangers of relying on unusual multinationals for economic growing? What should a nation do to compound by reversal such imbalances? give thanks!to attention me etutor answers: MNCs be, of course, of enormous benefit to countries, and particularly the UK. Overseas investiture in the UK now exceeds £370B, more of it coming from the US and the EU, and much of it centering upon manufacturing. Hence MNCs contribute 25% of the UKs manufacturing tabooput, 35% of man. investment and 30% of our visible exports. The drawbacks are as fol low-spiriteds: 1. MNCs look for low woo locations and/or places where market access is easy. The UK fits the bill truly puff up - low business taxes, cheap sites, relatively hardly a(prenominal) regulations, weakish unions and lowish tote costs, tariff-free access to EU markets. But ny of this can intensify - and gum olibanum MNCs can then recon locatingr their strategy, and pull ou t at short notice. The effect on national issue and traffic could then be very severe. 2. Though thither is oft technology transfer (i.e. domestic firms copy the advanced working practices comprise in most MNC plants) the more uncompetitive firms are possible to be taken over, or else may have to button up down, resulting in unemployment, and still greater dependency upon MNCs for domestic growth. 3.

entirely of the profits made by the MNCs in this country are repatriated to the parent company overseas - this is a net escape on the invisible account of the balance of payments. 4. Any receding in the MNCs home country is likely to see a cutback in overseas operations, as confidence, sales and funds wry out up - ! many US companies are shortly discriminating back on their overseas investments. In prescript a nation needs to resort to supply side policies to correct such imbalances - in other words policies designed to recruit the growth of domestic firms, and thus reduce the cartel upon MNC plants. such(prenominal) policies might include: privatisation, opening up of monopoly markets to greater...If you want to go through a full essay, order it on our website: OrderEssay.net

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